Major lenders agree to ease loan terms for flood victims
Members of Cambodia’s banking and microfinance apex bodies have agreed to ease restrictions on loan repayments, reduce interest rates and restructure loans for customers deemed significantly affected by heavy rains and storms. floods that have swept across the Kingdom in recent months. .
The decision, revealed in an October 19 joint statement by the Banking Association of Cambodia (ABC) and the Cambodian Microfinance Association (CMA), aims to offer “understanding and favour” to the most affected customers, such as the recommended Prime Minister Hun Sen two days earlier.
The offer will be made in accordance with a meeting between the ABC, the CMA and the National Bank of Cambodia (NBC) – which was held on October 17 – and pursuant to NBC Notification No. T7 022.818 dated October 18 , according to the press release.
“In this spirit, banking and financial institutions [BFI] within the two associations will ensure good cooperation within the framework of consumer protection and will continue to give priority through the restructuring of loans according to the conditions set by the National Bank of Cambodia.
“Institutions will also consider whether to relax interest rates and other credit-related charges, and/or waive fines and avoid seizure, with a deep sense of understanding and in accordance with the actual situation of customers,” he added.
CMA chairman and ABC board member Sok Voeun told the Post on Oct. 19 that the institutions “stand ready to support our clients,” noting that the provinces of Kampong Thom, Battambang, Siem Reap and Banteay Meanchey were particularly affected by the floods.
He claimed that the effect of the decision would not materially steer the cumulative growth rate of the banking and microfinance sectors relative to projections.
CMA spokesperson Kaing Tongngy told the Post on Oct. 19 that institutions would consider their customers’ flooding issues, “as usual,” to help ease their burdens.
“As our customers are affected by the floods, financial institutions will have to share the burden. CMA has worked closely with NBC and our members on the legal framework and operation to ensure effective support to affected customers through loan restructuring or other possible means.
“We are also mobilizing donations with our BFI members to support affected communities as part of our CSR [corporate social responsibility] program,” he said.
Cambodia experiences floods almost every year, with varying degrees of impact, Tongngy said, noting that major floods and natural disasters could derail the growth of the microfinance sector, with 19% of all its loans outstanding. related to agriculture.
Prime Minister Hun Sen announced on October 18 that he would visit four flood-affected provinces – Siem Reap, Banteay Meanchey, Battambang and Pursat – for five days starting October 20, to meet with victims and find solutions. to their fate.
A preliminary report by the Ministry of Economy and Finance indicates that as of October 12, more than 200,000 ha of rice fields nationwide have been significantly affected by the floods, of which 85,000 ha have suffered material damage, although that more than 48,000 ha are considered to be salvageable.